Why Are Fringe Benefits Important For Employees


Every form of employment must be equal to a measure of compensation. Employees expect to be paid for their work. The norm is being paid a fixed salary or wages in exchange for performance of tasks.

Another type of payment beyond traditional means is fringe benefits. They are known as allowances which are provided to employees for their service. Examples include a company car, paid holidays, and medical insurance and pension schemes.

Why these are significant and what their advantages are from both an employer and employee perspective is discussed further.


Fringe benefits can have a big impact on employee motivation. Motivation is defined as the desire to fulfil a responsibility. If employees show the energy and commitment to complete their tasks, then they are highly motivated.

Fringe benefits can incite extra motivation in workers. Human nature shows that we require encouragement and giving perks to workers can give them the extra psychological push they need. Each employee is likely to have different needs. A plan with additional benefits besides regular pay will help boost their morale, which will in turn improve employer’s chances of success.  Companies can consult dedicated professionals like power2motivate who specialize in developing employee recognition and performance solutions.


This brings us to another point which is decisive for companies. Firms which provide fringe benefits are more sought after in contrast to enterprises that do not. Incentivized jobs are likelier to draw the attention of candidates on the hunt for jobs. In this regard, fringe benefits can be an important recruitment tool as well.  If they are offering a good remuneration package which includes fringe benefits, it will give the firm a competitive image also. The better the profile, the higher supplementary benefits will be.


If we examine the idea from an employer stand point, it is a worthwhile form of contribution. Like we hinted at briefly, if bosses invest in employees, then the employees will be inclined to invest in the company in return.

Fringe benefits are bound to have a galvanizing effect on workers. They will naturally work harder if they are aware that their rewards are generous. Also, the general perception and feeling in the office will be healthier.

Moreover, this system will promote employee retention and loyalty. They will not look to jump ship. Low employee turnover is a favourable position for a company.


A lot of the advantages of fringe benefits overlap with each other. Job satisfaction will be greater if fringe benefits are part of the equation. The primary factor in any job will always be the salary but added benefits can be a catalyst for satisfied employees.

If you consider research and analysis conducted at various Australian universities, it gives conclusive evidence that job satisfaction and employee engagement are higher when workers are given perks and privileges like vehicle fuel grants and insurance coverage.